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Optimize Routes Using Spot Freight and a Higher-Paying Third Leg

Many owner-operators turn to the spot freight market -- a load board -- when they need a backhaul, sometimes taking a low rate just to get home. As a result, it's easy to think of load boards and backhauls as "cheap freight."

These days, that's just not so. On many lanes, spot market rates for vans are tracking higher than contract rates. Because of that, instead of settling for a straight round trip between Points A and B, you may be able to increase your loaded miles and profit by adding two higher-paying legs on your way back home -- forming a triangle route or "trihaul."

Running a Third Leg

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Say you haul a weekly load from Chicago to Dallas. You need a backhaul to Chicago to re-position your truck in time for the next outbound trip, but that Dallas-Chicago lane doesn't pay much. This is a good time to experiment with trihaul routing.

Almost any trihaul route will offer a better rate than a straight backhaul. With some smart HOS planning, a little math, and a truckload rate index tool or a fully featured load board, here are three steps you can take to create profitable triangular routes:

1. Draw a 250-mile circle from where you are

Ordinarily, triangle routes adding at least 250 miles to your trip will boost your total number of paid miles even when the rate is not substantially better than the original backhaul.

Say you're in Dallas and need a paying run back to Chicago. On your load board, look up mileage and rates from the Dallas metro area to major metro areas that are between 250 and 1,000 miles away. Eliminate cities that are less than 250 miles from Chicago.For this example, lets say going from Dallas to Kansas City and then to Chicago is the most profitable route (see the accompanying chart). The extra Kansas City leg adds 175 miles to the trip, but both legs of the trihaul pay more than the straight headhaul to Dallas. In this case, trihaul routing would earn you an extra $410.

The bottom line is that, together, the loads from Dallas to Point C and Point C to Chicago should put more money in your pocket than a straight backhaul.

2. Map the hot markets

Look at outbound loads from your top "Point C" options and evaluate the market conditions that determine rates -- or the rates themselves, if your load board has this feature -- on the second leg of your return trip.

Markets with a lot of outbound freight and a relatively high load-to-truck ratio are likely to have higher rates. If your load board has rate and demand indicators, look for the actual rates being paid by brokers in those lanes for the week, plus historic rate trends (they should go back at least one year plus a month for proper perspective). This information will help you to identify a handful of cities that are top candidates for the third point of your new triangle route.

3. Calculate and compare round-trip revenue

List your revenues and costs for the two or three triangle routes and compare them to a straight round trip. You can use the example in the sidebar or design a spreadsheet tailored to your specific operation. Once you have it set up, you can re-use the spreadsheet to analyze other routes quickly and efficiently.

Load boards and their freight analysis tools are better than ever. So are spot market rates. If you're already putting time and energy into finding a backhaul, go one step further. Try a trihaul.

Mark Montague is the industry freight analyst for TransCore, which operates the DAT Network of load boards and facilitates the matching of more than 60 million spot (non-contract) loads and trucks per year. He holds an MBA in Transportation Management from Indiana University and has applied his expertise in rates and routing for carriers, 3PLs, and shippers. He is based in Portland, Ore. For information click here.